The Stablecoin Illusion
Tether does not have 200 billion United States Dollars stored in a bank somewhere to repay the 200 billion in USDT currently in circulation. What does this mean? 1 USDT does not equal 1 USD or anything near it. This house of cards only stands because at this moment almost no one understands what crypto is and how it works. If everyone instantly realized that it is impossible that the value of one USDT can equal 1 USD, everyone would be demanding Tether exchange their USDT for USD, and tether will be unable to do this and will be successful in stealing billions from USDT holders. Technically this theft has already happened, but it gets much worse...
Tether's USDT is merely a smart contract on the ethereum block chain. Have you ever heard the saying, a contract usually favors the the one who wrote it? This holds true for all smart contracts. By design, all smart contracts are closed source code unless the contract creator decides to publish the source code that can be compiled by anyone to verify the compiled version on the blockchain matches the compiled source code. Tether has published the source code to it's USDT cryptocurrency contract in an effort to instill trust that there is nothing malicious in the source code.
Now imagine what percentage of the world population truly understands how crypto currency works. Now imagine what percentage of that group knows how to to lookup the source code to the tether USDT smart contract. Now imagine the number of people who know how to lookup the source code and have actually read through it. I am one of those and let me reveal to you how the tether UDST smart contract works.
Etherscan.io is currently the popular place to publish smart contract source code. The following link is to the published source code of the tether USDT smart contract.
https://etherscan.io/address/0xdac17f958d2ee523a2206206994597c13d831ec7#code
After you skip the first section (SafeMath), you will see the contract has something called the owner. This owner is a single ethereum address and technically anyone who holds the private key to this address is the owner. You will also see a function that allows for transfer of ownership. Tether has defined in their own contract that they are the owners. So why does this matter?
Line 250 is the start of the pause function that can only be triggered by the owner. What does this pause function do? Things like transferring tether USDT coins are not possible when the contract is in a paused state. With the smart contract paused, the USDT coin becomes unuseable as a crypto currency. The contract can then be left in a paused state forever if the owner so chooses.
Next are the blacklist functions that are only controllable by the owner address. They even have a destroy black funds function. This means that whomever is the current owner has the right to delete the tether coins of any address that belongs to anyone holding USDT. Do they need permission to delete your USDT crypto? No! The destroyBlackFunds function has been successfully executed 1,172 times (last checked August 12, 2026).
Another terrible idea is adding functions that allow smart contracts to be upgradeable. They may call it an upgrade but this is just the name of the function. This upgrade function controllable only by the owner allows redirection to any newly created smart contract that could do whatever it wants without you knowing it.
One day there will be someone who tries to convert 1% of the total USDT back to USD and tether will not be able to accommodate this withdraw request. Even now they make it extremely difficult to get USD back from USDT. You must first have over 100,000 USDT. You must undergo an extensive background check. The USD must be transferred to a verified back account that can freeze or seize all of it.
Coinbase USDC and other so called stable coins are almost identical to tether in it's features.
Tether is not tied to anything. It is not decentralized. It does not respect your freedom or privacy and can steal your USDT at anytime for no reason. Tether is the opposite of what cryptocurrency was meant to be with freedoms, privacy, security, and decentralization.